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This morning, Edge Online released a report that Microsoft's next Xbox console would use activation codes to lock physical discs to a single console. Edge's report also states that the next Xbox will require an online connection in order to function. This move would effectively kill used game sales and rentals at businesses like GameStop, Gamefly, and Redbox.

In response to the news, GameStop is trading at $25.04 at moment, down 6.56 percent from yesterday's close at $26.81. On the bright side, the stock has recovered from a low of $23.83 today.

Edge Online's report remains unconfirmed by Microsoft, who is expected to announce its next console at E3 2013.

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10 Comments

This will also kill borrowing a game from your friend or bringing stuff over to play like Little Big Planet.
Will the developers be on board? I am telling you they were sad about SOPA and PIPA. If game stop closes, Best Buy is closing stores and no one want to stand in line at Wall Mart for their crappy game section.

I get digital is the next thing but when sales drop cause people don't feel like downloading a game on bad WiFi connections. Or everyone tries to download on a Launch day...Can't wait to see what happens.

The only reason I got a 360 was because of the spindle of games my friend lent me. Remove this rentals and cheap second hand games.. .and there is no way i would ever buy this console. Unless game prices drop from 100au to 30 or less. In effect this is killing retail and forcing digital only.

1) Because PCs, tablets, and smart phones are an inherently personal and singleplayer experience, with only online play for multiplayer. Consoles are built around the living room - their very concept is about playing with others and playing socially. You lend games to friends, play together at each other's houses, and buy used games as part of the culture.

2) Because the pricing is on a completely different level. Mobile is the bottom of the pricing barrel, and Steam is a huge way down from consoles. I also wouldn't be surprised to see pubs use "nextgen" as an excuse to pop the price of a game up to $70 apiece.

@Dan
Maybe if it were locked to an account...but to a single machine? I have 3 PS3's in my home, due to kids having one in their room and our main living room...now I have to buy a disc for each person to play a game we might all like? Or no more being able to take games to a friends house to play on their machine when we visit...? And app store apps I can download to ANY of my machines, because again..its bound to an account, not the iPad/Iphone. They can kiss my ass if they do this, I'd drop Sony or Microsoft without a look back if either did that. Especially with the Xbox's rep for dead machines... I'd lose access to a game I paid for?? Again, hell no. I wish they'd quit trying to define a game as a service and feeling that they can do as they please by trampling over consumer rights...

I hate to doom-say (again) here, but this will kill of console gaming faster than any analyst and his crystal ball can. The sad fact is game companies are cramming too many charts and figures together and somehow think EVERYONE who bought physical media can and will lap up digital with no issues whatsoever or worse, that we'll "get used to" the launch day wait queues online to get that AAA title, failed downloads, more service issues than you can shake a stick at AND more likely than not, premium pricing to pay for the "privilege" of the same issues that make people hate mobile games (which are convenient to purchase, yes.. but end up costing more than console games at the end of the day in many cases).

I fully expect to see dwindling numbers compared to this cycle pushed out as huge "successes" because of plenty of early adopters who buy in because they have the bandwidth and no caps on their service, but as new users who can't get content look into these consoles (or pick them up without fully researching them outside of being knocked over by the purty grafix), expect them to stay away in droves until someone figures out that killing off retail and used games before they needed to go (in a more NATURAL manner) was and is a truly bad idea.

I can see this, though I think they are mistaken about some details. More than likely it's account bound, though considering the fact that none of it has been confirmed by Microsoft every single bit of it could be complete BS.

Maybe it's just me, but the wording of that source article doesn't seem entirely clear on what's (supposedly) being planned. Is it always on DRM (ie, your console needs to be permanently connected to the internet to function at all, like Ubisoft's disastrous PC DRM system a few years back, or Diablo III's much maligned online single player) or merely activating the game on your console when you play it for the first time (like Steam, or an extension of the online pass system that many console games already use)?

If they do try to block second hand sales and games rental entirely, I could see that running foul of the law, in the EU at least, as well as upsetting specialist retailers and a lot of their own customers.

As for always on DRM, remember when PSN was offline for a couple of months, or the shorter outages Xbox Live has had over its life time, sometimes stretching to a few hours or even days? Not to mention all the times your own personal internet connection has gone down, or you've moved house and it's taken you a week or two to get reconnected. Now imagine if that stopped you from using your console at all, not just stopping you from downloading new content or playing games online, but not even being able to play single player games offline.